Bank Insurance Brokerage Earnings Break Highest Mid-Year Level

Mid-year earnings from bank insurance brokerage hit their highest level ever in the first half of 2008.Bank insurance brokerage earnings in the first six months of 2008 were $2.12 billion, up 6.4 percent from $1.99 billion in the first half of 2007, according to the Michael White-Symetra Bank Fee Income Report. Growth slowed in the second quarter, however, as insurance brokerage revenues of $1.04 billion were 3.4 percent lower than the $1.08 billion in first quarter 2008. So far this year, 3,142 banks or 41.2 percent of all banks reported earning some insurance brokerage income.Banks over $10 billion in assets continued to have the highest participation (72.4 percent) in insurance brokerage activities that produced $1.73 billion in income in first half 2008, 11.3 percent more than the $1.56 billion they produced in first half 2007. These large banks accounted for 81.6 percent of all bank insurance brokerage fee income earned in first half 2008.
Nationally, Citibank N.A. (New York) reported insurance brokerage earnings of $743 million as of June 30, 2008, putting it in first place. Branch Banking and Trust Co. (North Carolina) ranked second nationally with $420.5 million in insurance brokerage fee income. FIA Card Services N.A. (Delaware), the former MBNA America Bank, N.A. now owned by Bank of America Corp., ranked third with $136.1 million in insurance brokerage revenue. Bank of America, N.A. (North Carolina) and BancorpSouth Bank (Mississippi) rounded out the top five in insurance brokerage income in first half 2008.Banks with assets between $1 billion and $10 billion registered $213.6 million in first-half insurance brokerage income, down 20.4 percent from $268.4 million a year ago. Their revenue represented 10.1 percent of total insurance brokerage income generated by banks. Banks with assets under $1 billion achieved a 4.3 percent increase, when their first-half insurance brokerage income rose from $168.7 million in 2007 to $176.0 million in 2008. Among these smaller banks, nearly two-fifths (39.7 percent) reported insurance brokerage income in first half 2008.
Among banks with assets under $1 billion, the leader with $10.8 million in insurance brokerage income in first half 2008 was the small, $88 million-asset, Florida-based Banco Popular, N.A., a subsidiary of the large Puerto Rico-based bank holding company, Popular Inc. The Adirondack Trust Co. (New York) was second with $4.6 million. Rounding out the top five were Spirit of America National Bank (Ohio), Bank First National (Wisconsin), and The Oneida Savings Bank (New York). Among these top five small banks, insurance program Concentration, i.e., ratio of insurance brokerage income to non-interest income, ranged from 51 percent to 93 percent, well above the mean Insurance Program Concentration Ratio for all banks of 5.2 percent. Seven of the top 10 banks in insurance brokerage income exceeded that mean ratio, and five had Concentration Ratios between 15 percent and 56 percent.Compiled by Michael White Associates LLC (MWA) and sponsored by Symetra Financial, the report measures and benchmarks banks' performance in generating insurance, securities brokerage, annuity and mutual fund fee income. It is based on data from all 7,622 commercial and FDIC-supervised savings banks operating at the end of second quarter 2008.
Bank insurance brokerage fee income consists of commissions and fees earned by a bank or its subsidiary from insurance product sales and referrals of credit, life, health, property, casualty, and title insurance. It does not include income earned from the sale or servicing of annuities. Banks' insurance income represents only a portion (historically, roughly one-third) of the banking industry's total insurance income, which will be revealed more completely in several weeks when year-to-date bank holding company fee income data at the end of second quarter 2008 becomes available.

Source: Michael White Associates LLC

Chubb Expands Multinational Insurance Coverage Capabilities

The Chubb Group announced that it has"expanded its multinational insurance group to encompass both Chubb's standard P/C products and specialty coverage, such as directors and officers liability insurance. Chubb added that with additional "dedicated employees" located "around the globe," its Multinational Risk Group is "now organized to provide customer-centric solutions that cross product lines and geographic boundaries."
Kathleen S. Ellis, Chubb Sr. VP and Multinational Risk Group manager, explained: "Multinationals face a host of complex and changing exposures, and we see those challenges extending to directors and officers and other executive liability insurance lines," said. "We know our agents, brokers and customers can't afford to experience lengthy waits for local policies or make multiple contacts for one insurance program. By addressing the entire commercial insurance spectrum for multinational customers within one unit, we can make the process as easy and efficient as possible."Chubb described the Multinational Risk Group s working through its "international network of branches, affiliates and correspondent brokers to coordinate underwriting, claims and loss control for multinational customers.
"The group facilitates the placement of underlying insurance in local markets and the coordination of controlled master programs, which include difference-in-conditions and difference-in-limits insurance that provides consistency in scope of insurance and service for a business' operations worldwide. It can also help agents and brokers forge relationships with correspondent brokers in the markets in which their customers require the placement of locally admitted insurance policies."

Source: Chubb Group - www.chubb.com

West Virginia Insurance Department Going Paperless

The West Virginia Insurance Commission sent a heads-up to all insurance companies licensed to do business in the state, informing them that the department will accept only electronic rate and form filings beginning in 2009.Insurance Commissioner Jane L. Cline said, effective Jan. 1, 2009, the West Virginia Offices of the Insurance Commissioner will no longer accept paper filings. All insurance rate, rule and form filings must be submitted via the system for electronic rate and form filing (SERFF). All fees due in connection with such filings must be paid with electronic funds transfer (EFT). Any paper filings received after the effective date will be returned to the filer without review.
Insurers, rating organizations and authorized filers can subscribe to SERFF by contacting SERFF at (816) 783-8787 or via e-mail at serffmktg@naic.org. Additional information regarding SERFF and EFT may be obtained by visiting www.serff.org. Insurers and other filers are encouraged to take formal training so they can fully utilize the SERFF system. Contact information regarding training can be found at the SERFF Web site at http://www.serff.org/training.htm. A variety of formats are available, including online training.
Cline said insurers are strongly encouraged to immediately begin making arrangements to use SERFF and EFT exclusively -- prior to the deadline. She also encourages insurers that use authorized filers to immediately notify those entities so that they can make arrangements to be SERFF and EFT compliant prior to the deadline.

Source: West Virginia Offices of the Insurance Commissioner

Central Insurance Names Eikenbary Vice President-Treasurer

Central Insurance Companies has promoted Thad R. Eikenbary to vice president-treasurer for both Central Mutual Insurance and All America.Eikenbary has been employed by Central Insurance for 17 years. He has held positions as a commercial underwriter, accountant, senior accountant, general accounting coordinator, corporate accounting manager and, most recently, assistant vice president-treasurer. He holds the associate in insurance accounting & finance designation.
Central was founded in Van Wert, Ohio in 1876, and provides insurance for automobiles, homes, and businesses to more than 321,000 policyholders in 19 states.

Source: Central Insurance Companies

Hanover Adds Employer Liability Insurance to Small Business Policy

The Hanover Insurance Group, Inc., a super regional property and casualty company, is now including employment practices liability insurance (EPLI) coverage as an endorsement to every eligible new and renewal Avenues Commercial Package Policy (CPP).This new endorsement promises to protect small and mid-sized businesses against employee allegations of job discrimination and wrongful termination. The EPLI coverage is designed to help businesses with up to 50 employees (51 to 250 by referral), that Hanover says traditionally shy away from costly stand-alone EPLI policies."Employment practices liability coverage has evolved from a high-priced option for large employers to an affordable necessity for all businesses," said David J. Firstenberg, president, commercial lines at The Hanover. "In today's workplace, small and mid-sized business owners must defend themselves against damaging employment claims. Our new program provides broad coverage and services that are specifically designed and priced for this market."
The features of the Hanover EPLI include:
Coverage for real exposure, such as employee allegations of sexual harassment, job discrimination, wrongful termination, mental anguish and emotional distress
Optional third-party coverage available at an additional premium
Broad coverage with up to $250,000 limit (higher limits available)
No separate underwriting process or application
Specialized claim services
Access to experienced EPLI law firms
Protection for agencies against errors and omissions claims

Source: The Hanover
www.hanover.com

Florida-based Comegys Insurance Acquires Jakhotia Insurance Group

St. Petersburg, Florida-based Comegys Insurance recently acquired Tampa-based Jakhotia Insurance Group. The employees of both firms will combine all operations in Comegys' offices in St. Petersburg effective immediately.Deepak "DJ" Jakhotia established Jakhotia Insurance in 1998. Jakhotia specializes in hotel/motels insurance coverage and retail segments throughout Florida.

Comegys Insurance Corner was founded in 1939 and is ranked by Insurance Journal (April 2008) as the 77th largest property and casualty insurance agency in the U.S.

Source: Comegys Insurance Corner
www.comegys.com

Meadowbrook Insurance Group Announces Founder Segal to Retire

Michigan-based Meadowbrook Insurance Group, Inc. recently announced today that its founder and chairman, Merton J. Segal, will retire as an employee of the company effective Sept. 30, 2008.Segal, 79 years old, founded Meadowbrook in 1955 as Meadowbrook Insurance Agency. Under his leadership, Meadowbrook has grown from a start-up local retail agency into a leading specialty risk management insurance company.Segal will continue to serve on the board of directors as a non-executive chairman and will also be a consultant to the company effective Oct. 1, 2008.
"Retiring at a time of record sales and profitability provides me with a great deal of satisfaction and fills me with a debt of gratitude to all the people who have played a part in the company's success," Segal said.Robert S. Cubbin, Meadowbrook's president and CEO said, "He has demonstrated a lifetime of achievement in the insurance industry. Mert is one of the most respected pioneers in the field of "alternative risk management."

Source: Meadowbrook Insurance Group